What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-02-14 compared with 2024-11-14 · 541 added, 273 removed, 270 unchanged (75% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

You should read the following

21 unchanged sentences

platforms, social commerce platforms and manufacturers to sell and transport consumer and industrial goods made in Asia into the U.S.

inception and as of September 30, 2024, we had served over 300 customers to fulfill over 45,000 cross-border supply chain solution orders.

inception and as of December 31, 2024, we had served over 300 customers to fulfill over 48,000 cross-border supply chain solution orders.

We have established an extensive

3 unchanged sentences

Since inception and as

of September 30, 2024, we had collaborated with almost all major global ocean and air carriers to forward 32,800 TEU of container loads

of December 31, 2024, we had collaborated with almost all major global ocean and air carriers to forward 33,800 TEU of container loads

and 59,600 tons of air cargo.

As of September 30, 2024, we had also cooperated with over 200 domestic ground transportation carriers,

including almost all major U.S.

domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may

We operate three massive and hyper-busy regional warehousing and distribution

centers in the U.S., in Illinois and Texas.

With an aggregate gross feet area of approximately 142,484 square feet and 52 docks,

our regional warehousing and distribution centers have an aggregate daily floor load of up to 3,000 cubic meters of freight.

to our self-operated regional centers, we maintain close contact with over 150 warehouses and distribution terminals in almost all transportation

hubs in the U.S.

which we have cooperated in the past to support the warehousing and distributing services of our cross-border freight

in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution in states other than Illinois

As of September 30, 2024, we had assisted with the customs clearance, in conjunction with our other service offerings, of cross-border

freight of an aggregate assessed value of over $42.6 million.

Leveraging our strong cross-border supply chain service capabilities,

extensive service provider network of cross-border freight carriers and U.S.

domestic ground transportation carriers, massive and

hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build

up our brand and reputation and have achieved fast growth since our inception.

For the three months ended September 30, 2024 and 2023,

our revenues amounted to $4.1 million and $4.1 million, respectively, and our gross profit amounted to $0.5 million and $0.6

million during the same periods, respectively.

As of September 30, 2024, we had fulfilled over 45,000 cross-border supply chain solution

orders for freight of an aggregate assessed value of $1.0 billion, delivered to thousands of business and residential addresses in

approximately 48 U.S.

As of December 31, 2024, we had also cooperated with over 200 domestic ground transportation carriers, including

almost all major U.S.

domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may be.

We operate three massive and

hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas.

With an aggregate gross feet area of approximately

142,484 square feet and 52 docks, our regional warehousing and distribution centers have an aggregate daily floor load of up to 3,000

cubic meters of freight.

In addition to our self-operated regional centers, we maintain close contact with over 150 warehouses and distribution

terminals in almost all transportation hubs in the U.S.

which we have cooperated in the past to support the warehousing and distributing

services of our cross-border freight in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution

in states other than Illinois and Texas.

As of December 31, 2024, we had assisted with the customs clearance, in conjunction with our

other service offerings, of cross-border freight of an aggregate assessed value of over $46.5 million.

Leveraging our strong cross-border

supply chain service capabilities, extensive service provider network of cross-border freight carriers and U.S.

domestic ground transportation

carriers, massive and hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have

been able to build up our brand and reputation and have achieved fast growth since our inception.

As of December 31, 2024, we had fulfilled

over 48,000 cross-border supply chain solution orders for freight of an aggregate assessed value of $1.0 billion, delivered to thousands

of business and residential addresses in approximately 48 U.S.

During the three and six months

ended December 31, 2024, we had a new business segment through acquired 100% equity interest of Hupan Pharmaceutical, a comprehensive

pharmaceutical distribution and supply chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare

technology support.

We have partnered with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical

products sold and distributed during this quarter.

For the six months ended December

31, 2024 and 2023, our total revenues amounted to $7.7 million and $9.1 million, respectively, and our gross profit amounted to $0.5 million

and $1.7 million during the same periods, respectively.

For the three months ended December 31, 2024 and 2023, our revenues amounted to

$3.6 million and $4.9 million, respectively, and our gross profit amounted to negative $0.04 million and $1.1 million during the same

periods, respectively.

Key Factors Affecting Our Results of Operations

4 unchanged sentences

are dependent upon our ability to expand and maintain our customer base.

Since inception and as of September 30, 2024, we had served over

Since inception and as of December 31, 2024, we had served over

300 customers to fulfill over 48,000 cross-border supply chain solution orders.

47 unchanged sentences

strategic partnerships could impact our results of operations and financial conditions.

Impact of COVID-19

The global spread of COVID-19

and the efforts to control it have slowed global economic activity and disrupted, and reduced the efficiency of, normal business activities

in much of the world.

The pandemic has resulted in authorities around the world implementing numerous unprecedented measures such as travel

restrictions, quarantines, shelter in place orders, and factory and office shutdowns.

These measures have impacted and will likely continue

to impact our workforce and operations, and those of our customers and suppliers.

Delays and congestions at

various ports as a result of the COVID-19 restrictions during the pandemic also prolonged the delivery times for certain of our cross-border

Additionally, ocean freight carriers have consolidated with the potential for more to occur in the future.

COVID-19 has placed

significant stress on our global ocean and air freight carriers, U.S.

domestic ground transportation carriers as well as other service

providers, which may result in reduced carrier capacity or availability, pricing volatility or more limited carrier transportation schedules

and other services that we utilize, which could adversely impact our business, financial condition and results of operations.

In response to governmental

22 unchanged sentences

domestic ground transportation services.

From December 2024, we started to generate revenues from the distribution

of pharmaceutical and medial products.

We order from the manufacturer, receive and carry the products at a designated warehouse, and deliver

the products to the customers’ warehouses or designated locations.

Cost of Revenues .

cost of revenues mainly comprises transportation and delivery costs, warehouse service charges, custom declaration and terminal charges,

freight arrangement charges and other overhead cost allocation which includes operating and financing lease-related costs, depreciation

expenses of property and equipment and other miscellaneous expenses.

cost of revenues from customized cross-border ocean and air freight solutions mainly comprises transportation and delivery costs, warehouse

service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation which includes

operating and financing lease-related costs, depreciation expenses of property and equipment and other miscellaneous expenses.

Our cost of revenues from

the distribution of pharmaceutical and medical products also comprises cost of pharmaceutical products from manufacturers, freight arrangement

charges and other overhead costs.

Selling Expenses .

selling expenses primarily include salaries expense of sales team engaged in developing potential customers and maintaining customer relationships.

General and Administrative

Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance expense,

depreciation on property and equipment, lease expenses, travelling and entertainment, bank charges, legal and professional fees, insurance

expenses and other office expenses.

Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance

expenses, depreciation on property and equipment, lease expenses, travelling and entertainment expenses, bank charges, legal and professional

fees, insurance expenses and other office expenses.

Other Income .

7 unchanged sentences

Results of Operations

For the Three Months Ended September 30,

2024 Compared to the Three Months Ended September 30, 2023

The following table summarizes

the results of condensed consolidated statements of operations and comprehensive income (unaudited) for the three months ended September

30, 2024 and 2023 in U.S.

For the Three Months Ended

September 30,

Cost of revenue

the results of condensed consolidated statements of operations and comprehensive income (unaudited) for the three and six months ended

December 31, 2024 and 2023 in U.S.

Six Months Ended

Three Months Ended

Revenue from cross-border freight solutions – third party

Revenue from cross-border freight solutions – related parties

Revenue from distribution of pharmaceutical products - third parties

Total revenue

Cost of revenue from cross-border freight solutions – third party

Cost of revenue from cross-border freight solutions – related party

Cost of revenue from pharmaceutical products - related parties

Total cost of revenue

Gross profit (loss)

Operating expenses:

Selling expenses

General and administrative expenses

Loss from deconsolidation of a subsidiary

Provision of allowance for expected credit loss

Provision (reversal) of allowance for expected

Total operating expenses

Loss from operations

Other income (expense):

Income (loss) from operations

Other income, net

Interest expense

Total other income, net

Loss before income taxes

Income taxes expense (recovery)

Net loss and comprehensive loss

Total other income

(Loss) income before income taxes

Income tax expense (credit)

Net (loss) income

net loss attributable to non-controlling interest

Net loss attributable to common stockholders

Other comprehensive loss

Foreign currency translation gain

Comprehensive loss

Net (loss) income attributable to the Company

Other comprehensive (loss) income:

Foreign currency translation income

Comprehensive (loss) income

comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to the common shareholders

Comprehensive(loss) income attributable to the Company

$ (3,294,413 )

$ (1,971,999 )

( Loss) earnings per share – basic and diluted

Weighted Average Shares Outstanding – basic and diluted

For the Three Months Ended December 31,

2024 Compared to the Three Months Ended December 31, 2023

The following table summarizes

our consolidated results of operations and percentages of certain items in relation to total revenues for the three months ended September

our consolidated results of operations and percentages of certain items in relation to total revenues for the three months ended December 31,

2024 and 2023, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

1 unchanged sentence

results in any historical period are not necessarily indicative of the results that may be expected for any future period.

For the three months ended September 30,

For the three months ended December 31,

Revenue from cross-border freight solutions

Cross-border ocean freight solutions

Cross-border airfreight solutions

Revenue from distribution of pharmaceutical products

Total revenues

Cost of revenues – cross-border freight solution

Cost of revenues –pharmaceutical products

Total cost of revenues

Gross profit – cross-border freight solution

Gross profit –pharmaceutical products

Total gross (loss) profit

$ (1,106,740 )

Our total revenues from cross-border freight solutions decreased by

$1.5 million, or 31.3%, from $4.9 million for the three months ended December 31, 2023, to $3.4 million for the three months ended

December 31, 2024.

The decrease was primarily driven by a significant decline in volume we handled from our cross-border airfreight

Revenues from our cross-border

airfreight solutions decreased by $1.1 million or 35.5%, from $3.1 million in the three months ended December 31, 2023, to $2.0 million

in the three months ended December 31, 2024.

The decrease was primarily due to a decrease in the volume of cross-border air

freight processed, from approximately 8,217 tons for the three months ended December 31, 2023, to approximately 4,459 tons for the

three months ended December 31, 2024.

Some of our customers reduced their orders and uncertainty in political regulations regarding

tariffs, leading to a significant decline in our revenue.

Revenues from our cross-border ocean freight solutions decreased by

$0.4 million, or 24.2%, from $1.8 million in the three months ended December 31, 2023, to $1.4 million in the three months ended

December 31, 2024.

This reduction was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded,

dropping from 1,330 TEU in the three months ended December 31, 2023, to 1,046 TEU in the three months ended December 31, 2024.

Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn, reduced the demand for

imported goods, leading to lower container volumes.

Starting from December 2024,

we established a new revenue stream through the distribution of pharmaceutical products.

We procured pharmaceuticals—primarily pharmaceutical

solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics.

For the three months ended December

31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment

in the same period of the prior year.

We anticipate a lower revenue

in the next quarter in the competitive and uncertain economic environment.

Despite of decreasing air freight volume and the upcoming new

rules to curtail small package and low value shipment from China to the U.S., we are committed to exploring new customers opportunities

while maintaining strong relationship with existing customers.

We believe that the ongoing trend toward online shopping highlights the

need for timely and competitively priced deliveries to end consumers.

Revenues by Customer Geographic

For the three months ended December 31,

Revenue from cross-border freight solutions

Asia-based customers

U.S.-based customers

Revenue from distribution of pharmaceuticals

Asia-based customers

Total revenues

$ (1,320,514 )

Revenues from cross-border

freight solutions for the Asia-based customers increased by $0.1 million, or 5.7%, from $2.6 million in the three months ended December 31,

2023, to $2.8 million in the three months ended December 31, 2024.

Revenues from cross-border freight solutions for the U.S.-based customers

decreased by $1.7 million, or 72.9%, from $2.3 million in the three months ended December 31, 2023 to $0.6 million in the same period

The increase in revenues from

Asia-based customers in the three months ended December 31, 2024, was driven by a surge in volume from a new Aisa-based customer

since June 2024, which was partly offset by decrease in shipments volume from Asia-based customers serving large e-commerce platforms

due to the discussion on the amendment of de minimis rule.

The decrease in revenue from the U.S.-based customers in the three

months ended December 31, 2024, compared to the same period in 2023, was primarily due to our strategic shift toward Asia-based e-commerce

customers, in addition to the overall decline in revenue discussed earlier.

Additionally, one-off special projects with larger shipment

volumes from U.S.

customers were completed in the three months ended December 31, 2023, with no comparable projects in the same period

Our customers for the distribution

of pharmaceutical products are based in China, as we specifically target the Chinese market.

For the three months ended

December 31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this

segment in the same period of the prior year.

Cost of Revenues

Our total revenues decreased

by $66,922, or 1.6%, from $4,148,476 for the three months ended September 30, 2023, to $4,081,554 for the three months ended September

The decrease was primarily driven by a decrease in revenues from our cross-border airfreight solutions, partially offset by

an increase in revenues from our cross-border ocean freight solutions.

A breakdown of our cost of

revenues for the three months ended December 31, 2024 and 2023 is as follows:

For the three months ended December 31,

Cost of revenue from cross-border freight solutions

Transportation and delivery costs

Warehouse service charges

Custom declaration and terminal charges

Freight arrangement charges

Overhead cost

Cost of revenue from distribution of pharmaceuticals

Cost of goods sold

Total cost of revenue

Our cost of revenues from

cross-border freight solutions decreased by $0.3 million, or 8.7%, from $3.9 million in the three months ended December 31, 2023,

to $3.5 million in the three months ended December 31, 2024.

The increase in cost of revenues was mainly due to the combined effects

a decrease in transportation and delivery costs, including trucking, drayage, chassis rental, freight and delivery cost during the three months ended December 31, 2024, which was primarily due to a reduction in delivery service provided to customers.

However, our reduction in transportation and delivery costs are significantly lower than the decline in revenue, due to high inflation in gasoline and labor cost over past year.

Additionally, the forwarding service for airfreights have strict timing requirements, preventing us from fully utilizing the capacity of each delivery, often resulting in trucks operating at half capacity;

a decrease in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the three months ended December 31, 2024, resulting from a drop in volume of cross-border freight we handled, particularly airfreight, during the same period;

a decrease in our warehouse service charges, mainly

representing labor costs at our regional warehousing and distribution centers during the three months ended December 31, 2024.

was due to a reduction in staffing costs related to unpacking shipments into smaller packages.

We gradually reduced the warehouse labor

however, adjusting to new labor schedules takes time;

no material change in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight during the three months ended December 31, 2024, primarily due to increased business for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising

warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the three months

ended December 31, 2024.

The warehouse and equipment lease expenses increased significantly, from $ 255,654 in the three months

ended December 31, 2023, to $499,021 in the three months ended December 31, 2024.

The increase was primarily because we had

two more warehouse lease agreements during the three months ended December 31, 2024, compared to the same period last year.

agreements were negotiated before the significant decline in our revenue.

To mitigate costs and improve our gross profit margin, we plan

to sublease one of the warehouse at Chicago in the next fiscal quarter.

Gross Profit (loss)

Our overall gross loss was

$42,231 in the three months ended December 31, 2024, compared to gross profit of $1,064,509 in same period last year.

The gross loss occurred primarily

due to two key factors.

First, there was a significant decrease in revenue due to stricter enforcement on the de minimis shipments regulations

for the six months ended December 31, 2024.

Second, despite this decline in revenue, the company’s fixed overhead costs remained high.

These costs, such as rent and warehouse labour are not easily adjusted in the short term.

As a result, the fixed overhead costs could

not be covered by the ordinary gross margin, leading to a gross loss for the period.

Additionally, while other cost of revenue decreased

in line with lower revenue, the reduction in costs lagged behind due to time constraints.

Our gross margin of cross-border freight

business remains a lower but positive number by not taking fixed overhead cost into consideration.

Our gross margin of distribution

of pharmaceutical was 44.2% for the three months ended December 31, 2024.

It is a new business segment during current quarter and

thus no gross margin was noted compared to same period in prior year.

Selling Expenses

Our selling expenses amounted

to $54,488 for the three months ended December 31, 2024, compared to nil for the same period in 2023.

The increase was primarily driven

by salaries for our sales team, which were incurred as part of the new pharmaceutical product business launched during the current quarter.

General and Administrative Expenses

Our general and administrative

expenses increased by $0.9 million, or 94.1%, from $1.0 million in the three months ended December 31, 2023, to $1.9 million in the

three months ended December 31, 2024.

These expenses represented 53.2% and 20.0% of our total revenues for the three months ended

December 31, 2024 and 2023, respectively.

The increase was primarily attributed to higher salary and employee benefit expenses and

professional fee operating as a listed company.

Our salaries and employee benefits expenses increased by $0.4 million,

or 64.1%, from $0.6 million in the three months ended December 31, 2023, to $1.1 million in the three months ended December 31,

Our salaries and employee benefits expenses represented 55.8% and 66.0% of our total general and administrative expenses for the

three months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to the recruitment of additional sales,

customer services, and back-office support personnel to support our business growth in first half of 2024, along with the salary expenses

associated with the two new subsidiaries in China.

For our salaries and employee benefits expenses, (i) our payroll expenses increased

by $0.4 million, or 70.7%, from $0.6 million in the three months ended December 31, 2023, to $1.0 million in the three months ended December

31, 2024, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution plan

in China, meal allowance and health insurance expenses, increased by $21,914, or 23.9%, from $91,674 in the three months ended December

31, 2023, to $113,588 in the three months ended December 31, 2024, representing 5.9% and 9.3% of our total general and administrative

expenses for the three months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to rising employee health insurance

Our professional fee increased by $0.2 million, or 1,359.3%, from $14,802

in the three months ended December 31, 2023, to $216,012 in the three months ended December 31, 2024.

Our professional fee represented

11.3% and 1.5% of our total general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively.

The increase was primarily due to audit fee, legal fee, consulting expense, investor-related expenses and financial reporting service

fees for the three months ended December 31, 2024.

In the three months ended December 31, 2023, most of the expenses directly

related to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.

Our traveling and entertainment expense increased by $0.2 million,

or 224.8%, from $87,900 in the three months ended December 31, 2023, to $285,541 in the three months ended December 31, 2024.

Our traveling and entertainment expense represented 14.9% and 8.9% of our total general and administrative expenses for three months ended

December 31, 2024 and 2023, respectively.

The increase was mainly due to higher entertainment and gift expenses related to networking

with our business partners as we started a new business through the new subsidiary acquired.

Other Income, Net

Our other income, net, increased by $50,253, or 121.1%, from $41,500

in the three months ended December 31, 2023, to $91,753 in the three months ended December 31, 2024.

The increase was primarily

becuase we did not rent out part of our warehouse space to our related party, Weship, during the three months ended December 31,

Interest Expenses

Our interest expenses for

the three months ended December 31, 2024, remained relatively stable compared to same period in last year.

Income (Loss) Before Income Taxes

We had loss before income

taxes of $1.9 million for the three months ended December 31, 2024, compared to income before income taxes of $92,408 for the three

months ended December 31, 2023.

We were in a loss position before income taxes for the three months ended December 31, 2024,

primarily attributable to the net effects of:

(i) the decrease in gross profit, (ii) the rise in operating expenses;

and (iii) the

increase in other income for the three months ended December 31, 2024 as mentioned above.

Income Tax Expense

We had income tax expense

of $nil and $28,184 in the three months ended December 31, 2024 and 2023, respectively.

We did not have current income tax provision

in the three months ended December 31, 2024, due to net operating loss, and we recognized a net deferred income tax asset of $585,197

due to temporary differences recognized and net operating loss carried forward.

We also recognized a valuation allowance of $585,197 to

write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable

income, resulting in a net income tax expense of $nil in the three months ended December 31, 2024.

We did not have current income

tax provision in the three months ended December 31, 2023, due to net loss, however, we recognized a deferred income tax asset of

$71,909, due to temporary differences recognized and a deferred income tax expense of $28,184 due to temporary differences recognized.

Net Income (Loss)

As a result of the foregoing,

we had a net loss of $1.9 million and a net income of $64,224 for the three months ended December 31, 2024 and 2023, respectively.

For the Six Months Ended December 31,

2024 Compared to the Six Months Ended December 31, 2023

The following table summarizes

our consolidated results of operations and percentages of certain items in relation to total revenues for the six months ended December 31,

2024 and 2023, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

The operating

results in any historical period are not necessarily indicative of the results that may be expected for any future period.

For the six months ended December 31,

Revenue from cross-border freight solutions

Cross-border ocean freight solutions

Cross-border airfreight solutions

Revenue from distribution of pharmaceutical products

Total revenues

Cost of revenues – cross-border solution

Cost of revenues –pharmaceutical products

Total cost of revenues

Gross profit – cross-border freight solution

Gross profit –pharmaceutical products

$ (1,231,744 )

Our total revenues from cross-border

freight solution decreased by $1.6 million, or 17.7%, from $9.1 million for the six months ended December 31, 2023, to $7.5

million for the six months ended December 31, 2024.

The decrease was primarily driven by a significant decline in volume we handled

from our cross-border airfreight solutions.

Revenues from our cross-border

airfreight solutions decreased by $0.2 million or 8.2%, from $2.4 million in the three months ended September 30, 2023, to $2.2 million

in the three months ended September 30, 2024.

airfreight solutions decreased by $1.3 million or 23.4%, from $5.5 million in the six months ended December 31, 2023, to $4.2 million

in the six months ended December 31, 2024.

The decrease was primarily due to a decrease in the volume of cross-border air freight

processed, from approximately 7,816 tons for the three months ended September 30, 2023, to approximately 7,273 tons for the three months

ended September 30, 2024.

processed, from approximately 16,034 tons for the six months ended December 31, 2023, to approximately 11,732 tons for the six months

ended December 31, 2024.

Some of our customers reduced their orders and uncertainty in political regulations regarding tariffs, leading

to a significant decline in our revenue.

Revenues from our cross-border

ocean freight solutions increased by $0.1 million, or 7.8%, from $1.7 million in the three months ended September 30, 2023, to $1.8 million

in the three months ended September 30, 2024.

This growth was primarily due to an increase in the volume of cross-border ocean freights

processed and forwarded, rising from 1,290 TEU in the three months ended September 30, 2023, to 1,430 TEU in the three months ended September

We anticipate a revenue rebound

in the next quarter, driven by increased air freight demand for the upcoming holiday season as online purchases surge.

In response to

rising customer demand, we have expanded our production capacity and are now equipped to handle a higher volume of purchase orders.

Additionally,

the continued decline in ocean freight charges is stimulating import and export activities, while the ongoing trend toward online shopping

highlights the need for timely and competitively priced deliveries to end consumers.

ocean freight solutions decreased by $0.3 million, or 8.7%, from $3.5 million in the six months ended December 31, 2023, to $3.2

million in the six months ended December 31, 2024.

This growth was primarily due to a decrease in the volume of cross-border ocean

freights processed and forwarded, dropping from 2,620 TEU in the six months ended December 31, 2023, to 2,476 TEU in the six months

ended December 31, 2024.

Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn,

reduced the demand for imported goods, leading to lower container volumes.

Starting from December 2024, we established a new revenue stream through

the distribution of pharmaceutical products.

We procured pharmaceuticals—primarily pharmaceutical solutions—directly from

manufacturers and supplied them to distributors, hospitals, and clinics.

For the six months ended December 31, 2024, our total revenue

from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the

Revenues by Customer Geographic

For the three months ended September 30,

For the six months ended December 31,

Revenue from cross-border freight solutions

Asia-based customers

U.S.-based customers

Revenue from distribution of pharmaceuticals

Asia-based customers

Total revenues

Revenues from the Asia-based

customers increased by $1.1 million, or 65.8%, from $1.7 million in the three months ended September 30, 2023, to $2.8 million in the

three months ended September 30, 2024.

Revenues from the U.S.-based customers decreased by $1.2 million, or 48.2%, from $2.5 million

in the three months ended September 30, 2023 to $1.3 million in the same period in 2024.

$ (1,387,436 )

Revenues from cross-border

freight solutions for the Asia-based customers increased by $1.3 million, or 29.4%, from $4.3 million in the six months ended December 31,

2023, to $5.6 million in the six months ended December 31, 2024.

Revenues from cross-border freight solutions for the U.S.-based customers

decreased by $2.9 million, or 60.2%, from $4.8 million in the six months ended December 31, 2023 to $1.9 million in the same period

The increase in revenues from

Asia-based customers in the three months ended September 30, 2024, was driven by a surge in volume from these customers, particularly

those serving large e-commerce platforms.

This growth reflects the rising demand for our services, a direct result of the overall expansion

e-commerce market.

Asia-based customers in the six months ended December 31, 2024, was driven by a surge in volume from a new Aisa-based customer since

June 2024, which was partly offset by decrease in shipments volume from Asia-based customers serving large e-commerce platforms due to

the discussion on the amendment of de minimis rule.

The decrease in revenue from

the U.S.-based customers in the three months ended September 30, 2024, compared to the same period in 2023, was primarily due to our strategic

shift toward Asia-based e-commerce customers.

Additionally, special projects with larger shipment volumes from U.S.

customers were completed

in the three months ended September 30, 2023, with no comparable projects in the same period in 2024.

the U.S.-based customers in the six months ended December 31, 2024, compared to the same period in 2023, was primarily due to our

strategic shift toward Asia-based e-commerce customers, in addition to the overall decline in revenue discussed earlier.

Additionally,

one-off special projects with larger shipment volumes from U.S.

customers were completed in the six months ended December 31, 2023,

with no comparable projects in the same period in 2024.

Our customers for the distribution of pharmaceutical products are based

in China, as we specifically target the Chinese market.

For the six months ended December 31, 2024, our total revenue

from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the

Cost of Revenues

A breakdown of our cost of

revenues for the three months ended September 30, 2024 and 2023 is as follows:

For the three months ended September 30,

revenues for the six months ended December 31, 2024 and 2023 is as follows:

For the six months ended December 31,

Cost of revenue from cross-border freight solutions

Transportation and delivery costs

3 unchanged sentences

Overhead cost

Cost of revenue from distribution of pharmaceuticals

Cost of goods sold

Total cost of revenue

Our cost of revenues increased

by $0.1 million, or 1.7%, from $3.5 million in the three months ended September 30, 2023, to $3.6 million in the three months ended September

The increase in cost of revenues was mainly due to the combined effects of:

an increase in our warehouse service charges, mainly representing labor costs at our regional warehousing and distribution centers during the three months ended September 30, 2024, due to (a) extended service hours to process higher volumes of cross-border airfreight, and (b) the hiring of additional employees at our regional warehousing and distribution centers to support our growing business;

an increase in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the three months ended September 30, 2024, resulting from the higher assessed value of cross-border freight, particularly airfreight, during the same period;

an increase in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight during the three months ended September 30, 2024, primarily due to increased business for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising

warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the three months

ended September 30, 2024.

The warehouse and equipment lease expenses increased significantly, from $207,807 in the three months ended

September 30, 2023, to $410,193 in the three months ended September 30, 2024.

The increase in lease expenses was primarily due to the

addition of two warehouse agreements in the three months ended September 30, 2024, compared to the same period last year, and

A decrease in transportation and delivery costs, including trucking, drayage, chassis rental, freight and delivery cost during the three months ended September 30, 2024, which was primarily due to a reduction in delivery service provided to customers.

Instead, we offered a more comprehensive service package, which included warehouse and transloading services.

Our gross profit decreased

by $0.1 million, or 19.3%, from $0.6 million in the three months ended September 30, 2023, to $0.5 million in the three months ended September

Our gross margin was 12.8% for the three months ended September 30, 2024, compared to 15.6% for the three months ended September

The decline in gross margin was primarily attributable to (i) reduced revenue from the airfreight solution, and (ii) an increase

in our cost of revenue in warehouse services, custom declaration and terminal charges, frights arrange charge and overhead costs allocated,

as discussed above.

Our cost of revenues decreased by $0.2 million, or 2.1%, from $7.4

million in the six months ended December 31, 2023, to $7.2 million in the six months ended December 31, 2024.

The decrease in

cost of revenues was mainly due to the combined effects of:

a decrease in transportation and delivery costs,

including trucking, drayage, chassis rental, freight and delivery cost during the six months ended December 31, 2024, which was primarily

due to a reduction in delivery service provided to customers.

However, our reduction in transportation and delivery costs are significantly

lower than the decline in revenue, due to high inflation in gasoline and labor cost over past year.

Additionally, the forwarding service

for airfreights have strict timing requirements, preventing us from fully utilizing the capacity of each delivery, often resulting in

trucks operating at half capacity;

a decrease in our warehouse service charges, mainly representing labor

costs at our regional warehousing and distribution centers during the six months ended December 31, 2024, due to decrease in staff

cost in connection with unpackaging shipment into small packages.

We gradually reduced the warehouse labor shifts;

however, adjusting

to new labor schedules takes time;

a decrease in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the six months ended December 31, 2024，resulting from a drop in volume of cross-border freight we handled, particularly airfreight, during the same period.;

an increase in freight arrangement charges, mainly

representing scheduling and booking fees for cross-border ocean freight during the six months ended December 31, 2024, primarily

due to increased business for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising warehouse and equipment

lease expenses, utilities, depreciation of property and equipment, and other direct costs during the six months ended December 31,

The warehouse and equipment lease expenses increased significantly, from $527,759 in the six months ended December 31, 2023,

to $1,002,820 in the six months ended December 31, 2024.

The increase was primarily we had two more warehouse lease agreements during

the three months ended December 31, 2024, compared to the same period last year.

These agreements were negotiated before the significant

decline in our revenue.

To mitigate costs and improve our gross profit margin, we plan to sublease one of the warehouse at Chicago in

the next fiscal quarter.

Our overall gross profit decreased

by $1.2 million, or 71.9%, from $1.7 million in the six months ended December 31, 2023, to $0.5 million in the six months ended December 31,

Our gross margin of cross-border freight solution was 5.1% for the six months ended December 31, 2024, compared to 18.9% for

the six months ended December 31, 2023.

The decline in gross margin was primarily attributable to (i) revenue from the airfreight

and ocean freight solution decreased to a greater extend to decrease in our cost of revenue, such as transportation and delivery cost,

warehouse services, custom declaration and terminal charges, and (ii) increased overhead costs allocated, as discussed above.

Our gross margin of distribution

of pharmaceutical was 44.2% for the six months ended December 31, 2024.

It is a new business segment during current quarter and thus

no gross margin was noted compared to same period in prior year.

Selling Expenses

Our selling expenses amounted to $54,488 for the six months ended December

31, 2024, compared to nil for the same period in 2023.

The increase was primarily driven by salaries for our sales team, which were incurred

as part of the new pharmaceutical product business launched during the current quarter.

General and Administrative Expenses

Our general and administrative

expenses increased by $1.0 million, or 114.7%, from $0.9 million in the three months ended September 30, 2023, to $1.8 million in the

three months ended September 30, 2024.

These expenses represented 45.0% and 20.6% of our total revenues for the three months ended September

30, 2024 and 2023, respectively.

The increase was primarily attributed to higher salary and employee benefit expenses, professional fee,

office expense and traveling, insurance expense and entertainment expense:

Our salaries and employee

benefits expenses increased by $0.3 million, or 116.9%, from $0.5 million in the three months ended September 30, 2023, to $0.8 million

in the three months ended September 30, 2024.

Our salaries and employee benefits expenses represented 50.3% and 66.8% of our total general

and administrative expenses for the three months ended September 30, 2024 and 2023, respectively.

The increase was mainly due to the recruitment

of additional sales, customer services, and back-office support personnel to support our business growth.

For our salaries and employee

benefits expenses, (i) our payroll expenses increased by $0.3 million, or 63.6%, from $0.5 million in the three months ended September

30, 2023, to $0.8 million in the three months ended September 30, 2024, and (ii) our employee benefit expenses, which mainly consist of

401(k) company contribution, meal allowance and health insurance expenses, increased by $0.01 million, or 53.3%, from $0.1 million in

the three months ended September 30, 2023, to $0.2 million in the three months ended September 30, 2024, representing 8.9% and 12.5% of

our total general and administrative expenses for the three months ended September 30, 2024 and 2023, respectively.

The increase was mainly

due to rising employee health insurance premiums.

Our professional fee increased

by $0.3 million, or 1,839.6%, from $17,535 in the three months ended September 30, 2023, to $340,114 in the three months ended September

Our professional fee represented 18.5% and 2.0% of our total general and administrative expenses for the three months ended

September 30, 2024 and 2023, respectively.

The increase was primarily due to audit fee, legal fee, consulting expense, investor-related

expenses and financial reporting service fees for the three months ended September 30, 2024.

In the three months ended September 30, 2023,

most of the expenses directly related to offering that were not included in professional fees, as they were accounted for as deferred

initial public offering assets.

Our office expense represented

9.0% and 8.2% of our total general and administrative expenses for three months ended September 30, 2024 and 2023, respectively.

was mainly due to office hardware including monitors and keyboard, printer ink, printer kits and charger purchased and more office supplies

consumed due to more staff hired.

Our insurance expense

increased by $68,937, or 1,452.6%, from $4,746 in the three months ended September 30, 2023, to $73,683 in the three months ended

September 30, 2024.

The increase was primarily due to purchasing insurance premiums for our directors and officers, as we became a

public company in July 2024.

Our general and administrative expenses increased by $1.9 million,

or 103.7%, from $1.8 million in the six months ended December 31, 2023, to $3.7 million in the six months ended December 31,

These expenses represented 48.8% and 20.3% of our total revenues for the six months ended December 31, 2024 and 2023, respectively.

The increase was primarily attributed to higher salary and employee benefit expenses, professional fee, office expense and traveling,

insurance expense and entertainment expense:

Our salaries and employee benefits expenses increased by $0.8 million,

or 63.0%, from $1.2 million in the six months ended December 31, 2023, to $2.0 million in the six months ended December 31,

Our salaries and employee benefits expenses represented 53.1% and 66.3% of our total general and administrative expenses for the

six months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to (i) the recruitment of additional sales,

customer services, and back-office support personnel to support our business in first half 2024, and (ii) salaries of management and operation

team for our new business in China.

For our salaries and employee benefits expenses, (i) our payroll expenses increased by $0.7 million,

or 67.5%, from $1.0 million in the six months ended December 31, 2023, to $1.7 million in the six months ended December 31,

2024, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution plan

in China, meal allowance and health insurance expenses, increased by $0.1 million, or 39.8%, from $0.2 million in the six months ended

December 31, 2023, to $0.3 million in the six months ended December 31, 2024, representing 7.4% and 10.8% of our total general

and administrative expenses for the six months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to rising

employee health insurance premiums.

Our professional fee increased by $0.5 million, or 1,619.8%, from $32,337

in the six months ended December 31, 2023, to $556,126 in the six months ended December 31, 2024.

Our professional fee represented

14.8% and 1.8% of our total general and administrative expenses for the six months ended December 31, 2024 and 2023, respectively.

The increase was primarily due to audit fee, legal fee, consulting expense, investor-related expenses and financial reporting service

fees for the six months ended December 31, 2024.

In the six months ended December 31, 2023, most of the expenses directly related

to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.

Our insurance expense increased

by $0.1 million, or 1,701.0%, from $6,948 in the six months ended December 31, 2023, to $125,131 in the six months ended December 31,

The increase was primarily due to purchasing insurance premiums for our directors and officers, as we became a public company in

Our traveling and entertainment

expense represented 6.9% and 8.4% of our total general and administrative expenses for three months ended September 30, 2024 and 2023,

expense represented 11.0% and 8.7% of our total general and administrative expenses for six months ended December 31, 2024 and 2023,

respectively.

The increase was mainly due to higher entertainment and gift expenses related to networking with our business partners.

The increase was mainly due to higher entertainment and gift expenses related to networking with our business partners as

well as more business trips during recent quarter.

Other Income, Net

Our other income, net, increased

by $62,839, or 133.8%, from $46,949 in the three months ended September 30, 2023, to $109,788 in the three months ended September 30,

The increase was primarily due to renting out part of our office space to our related party, Weship, for an additional two months

during the three months ended September 30, 2024.

Our other income, net, increased by $0.1 million, or 127.9%, from $0.1

million in the six months ended December 31, 2023, to $0.2 million in the six months ended December 31, 2024.

The increase was

primarily due to renting out part of our warehouse space to our related party, Weship, for an additional five months during the six months

ended December 31, 2024.

Interest Expenses

Our interest expenses for

the three months ended September 30, 2024, remained relatively stable compared to same period in last year.

Our interest expenses increased by $15,128, or 28.1%, from $53,864

in the six months ended December 31, 2024, to $68,992 in the six months ended December 31, 2024.

Increase interest expense was

mainly due to late credit card payments.

Loss Before Income Taxes

We had loss before income

taxes of $1.2 million for the three months ended September 30, 2024, compared to loss before income taxes of $0.3 million for the three

months ended September 30, 2023.

We were in a loss position before income taxes for the three months ended September 30, 2024, primarily

attributable to the net effects of:

taxes of $3.2 million and $0.2 million for the six months ended December 31, 2024 and 2023.

Our loss before income taxes increased

primarily attributable to the net effects of:

(i) the decrease in gross profit, (ii) the rise in operating expenses;

and (iii) the

increase in other income for the three months ended September 30, 2024 as mentioned above.

increase in other income for the six months ended December 31, 2024 as mentioned above.

Income Tax Expense

We had income tax expense

of $89,581 and income tax recovery of $2,059 in the three months ended September 30, 2024 and 2023, respectively.

We did not have current

income tax provision in the three months ended September 30, 2024, due to net operating loss, and we recognized a deferred income tax

asset of $373,897 due to temporary differences recognized and net operating loss carried forward.

We also recognized a valuation allowance

of $463,478 to write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset

future taxable income, resulting in a net deferred tax expense of $89,581 in the three months ended September 30, 2024.

We did not have

current income tax provision in the three months ended September 30, 2023, due to net operating loss, and we recognized a deferred income

tax asset of $2,059, due to temporary differences recognized and a deferred income tax expense of $373,897 due to the change from an S

Corporation to a C Corporation upon the completion of our reorganization on September 23, 2023.

Since our transition to a C Corporation

on September 23, 2023, ABL Chicago, our subsidiary in the U.S.

is now obligated to pay federal tax at a rate of 21% and Illinois state

tax at a rate of 7.5%.

This tax obligation was previously exempt for us as an S Corporation.

of $89,581 and $26,125 in the six months ended December 31, 2024 and 2023, respectively.

We did not have current income tax provision

in the six months ended December 31, 2024, due to net operating loss, and we recognized a deferred income tax asset of $959,094 due

to temporary differences recognized and net operating loss carried forward.

We also recognized a valuation allowance of $1,048,675 to

write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable

income, resulting in a net income tax expense of $89,581 in the six months ended December 31, 2024.

We did not have current income

tax provision in the six months ended December 31, 2023, due to net loss, however, we recognized a deferred income tax asset of $8,231,

due to temporary differences recognized and a deferred income tax expense of $17,894 due to the change from an S Corporation to a C Corporation

upon the completion of our reorganization on September 23, 2023.

As a result of the foregoing,

we had a net loss of $1.3 million and $0.3 million for the three months ended September 30, 2024 and 2023, respectively.

we had a net loss of $3.3 million and $0.2 million for the six months ended December 31, 2024 and 2023, respectively.

Liquidity and Capital Resources

As of September 30, 2024,

As of December 31, 2024,

we had a cash and cash equivalent balance of $1.1 million.

Our current assets were $4.4 million, and our current liabilities were

$4.4 million, resulting in a current ratio of 1.3:1 and a positive working capital of $1.4 million.

$5.4 million, resulting in a current ratio of 0.81:1 and a negative working capital of $1.1 million.

Total stockholders’ equity

as of September 30, 2024 was $3.6 million.

As of September 30, 2024

as of December 31, 2024 was $1.6 million.

As of December 31, 2024

and June 30, 2024, we had accounts receivable net of allowance of $1.9 million and $2.8 million, respectively.

2 unchanged sentences

allowances if necessary.

For the accounts receivable, as of September 30, 2024 and June 30, 2023, we provided a credit loss

allowance of $66,903 and $54,066, respectively.

In assessing our liquidity,

we monitor and analyze our cash on hand, our ability to generate sufficient revenue sources in the future, and our operating and capital

expenditure commitments.

Historically, we have funded our working capital needs primarily through operations, loans, and working capital

loans from stockholders.

Since our offering closed in July 2024, we plan to use the proceeds to meet our ongoing working capital requirements.

Our working capital requirements are influenced by the efficiency of our operations, the volume and dollar value of our revenue contracts,

the progress or execution of customer contracts, and the timing of accounts receivable collections.

For the accounts receivable, as of December 31, 2024 and June 30, 2024, we provided a credit loss allowance

of $56,022 and $54,066, respectively.

In assessing our liquidity, we monitor and analyze our cash on hand,

our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments.

Historically,

we have funded our working capital needs primarily through operations, loans, and working capital loans from stockholders.

capital requirements are influenced by the efficiency of our operations, the volume and dollar value of our revenue contracts, the progress

or execution of customer contracts, and the timing of accounts receivable collections.

The following table sets forth

summary of our cash flows for the periods indicated:

For the periods ended

September 30,

For the six months ended

Net cash (used in) provided by operating activities

1 unchanged sentence

Net cash used in investing activities

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

Net increase in cash and cash equivalent

Cash and cash equivalent, beginning of the period

Cash and cash equivalent, end of the period

Cash, beginning of the period

Cash, end of the period

Operating Activities

cash used in operating activities was $1,402,784 in the three months ended September 30, 2024, including net loss of $1,335,407, adjusted

for non-cash items for $612,895 and changes in working capital of negative $680,272.

The non-cash items primarily included $466,723 amortization of operating lease assets, $36,159 depreciation included

in G&A and cost of revenue, $7,595 depreciation of right-of-use finance assets and $12,837 from provision of allowance for expected

credit loss and a decrease of $89,581 from deferred tax asset due to recognition of valuation allowance.

The adjustments for changes in

working capital mainly included a decrease of $402,895 and $156,850 in accounts payable — third parties and related parties, respectively,

an increase of $77,812 in due from related parties because of rental income recognized for the three months ended September 30, 2024,

a decrease of $470,260 in operating lease liabilities and a decrease of $24,876 in accrued expense and

other payable, partially offset by a decrease of $282,864 and $257,924 in accounts receivable — third parties and related parties,

respectively, due to a decrease of revenues near period end.

Net cash used in operating activities was $1,933,000 in the six months

ended December 31, 2024, including net loss of $3,282,227, adjusted for non-cash items for $1,183,152 and changes in working capital

of positive $166,075.

The non-cash items primarily included $989,003 amortization and interest expense of operating lease assets, $87,132

depreciation included in G&A and cost of revenue, $15,480 depreciation of right-of-use finance assets and $1,956 from provision of

allowance for expected credit loss and a decrease of $89,581 from deferred tax asset due to recognition of valuation allowance.

The adjustments

for changes in working capital mainly included a decrease of $424,648 and $565,766 in accounts receivable — third parties and related

parties, respectively, due to a decrease of revenues near period end and an increase of $312,722 in accrued expense and other payable,

partially offset by an increase in prepayment of $112,620, a decrease of $742,649 in operating lease liabilities and a decrease of $156,165

in accounts payable — related parties.

Net cash provided by operating

activities was $40,357 for the three months ended September 30, 2023, including net loss of $307,285, adjusted for non-cash items for

$386,277, and changes in working capital of negative $38,635.

The non-cash items primarily included $219,571 amortization of operating

lease assets, $36,160 depreciation included in G&A and cost of revenue, $52,122 from provision of allowance for expected credit loss,

and impacted by a loss of $73,151 from deconsolidation of a subsidiary.

The adjustments for changes in working capital mainly included

a decrease of $225,023 in operating lease liabilities, a decrease of $49,182 in due from related parties , an increase of $65,995 in accounts

receivable — related parties and an increase of $138,491 in accounts receivable — third parties reflecting the impact of revenue

growth combined with the timing of payments to third party providers, related parties and collections from clients on net working capital,

partially offset by an increase of $133,904 in accounts payable — third parties, an increase of $141,213 in accounts payable —

related parties, an increase of $37,739 in accrued expenses and other payables, and a decrease of $26,213 in contract assets.

The $1,443,141 increase in

cash used in operating activities in the three months ended September 30, 2024 compared to the prior year was primarily due to an increase

in net loss of $1,028,122 in the three months ended September 30, 2024 compared to same period in the prior year, together with an increase

of $641,637 in cash outflow from working capital due to timing of vendor payments, client payments and related parties payment.

activities was $257,836 for the six months ended December 31, 2023, including net loss of $243,061, adjusted for non-cash items

for $674,713, and changes in working capital of negative $173,816.

The non-cash items primarily included $439,142 non-cash operating lease

expense, $72,319 depreciation and amortization, $49,591 from provision of allowance for expected credit loss, and impacted by a loss of

$73,151 from deconsolidation of a subsidiary.

The adjustments for changes in working capital mainly included (i) an increase of $192,609

in accounts receivable — related parties, (ii) an increase of $479,056 in accounts receivable — third

parties reflecting the impact of revenue growth combined with the timing of payments to third party providers, related parties and collections

from clients on net working capital and (iii) an increase of $27,169 in contract assets, partially offset by (i) an increase of $539,542

in accounts payable — third parties, (ii) an increase of $241,721 in accounts payable — related parties

and (iii) an increase of $122,547 in accrued expenses and other payables.

The $2,190,836 increase in cash used in operating activities in the

six months ended December 31, 2024 compared to the prior year was primarily due to an increase in net loss of $3,039,166 in

the six months ended December 31, 2024 compared to same period in the prior year, partly offset by an increase of $339,891 in

cash flow from working capital due to timing of vendor payments, client payments and related parties payment.

Investing Activities

Net cash used in investing

activities was $38,279 and $78,799 for the three months ended September 30, 2024 and 2023, respectively.

Net cash used in investing activities

for the three months ended September 30, 2024, was primarily attributable to our purchases of property and equipment and the prepayment

for the installation of a security system which was still in progress as of the period ended.

On August 4, 2023, we reduced our unpaid

registered capital contribution in our investee company in China, namely ABL Wuhan, and concurrently, the third-party shareholders increased

their registered capital contribution accordingly.

Following this change, the third-party shareholders own 80% of equity interest and

we own 20% of equity interest in ABL Wuhan.

Net cash used in investing activities was $1,350,498 and $78,799 for

the six months ended December 31, 2024 and 2023, respectively.

Net cash used in investing activities for the six months

ended December 31, 2024, was primarily attributable to net cash payment of $552,721 for intangible assets through acquisition of

100% equity interest in Hupan Pharmaceutical and we had a loan of $686,697 to a third party.

We also purchased property and equipment,

conducted office renovation for our operation of subsidiaries in Mainland China.

On August 4, 2023, we reduced our unpaid registered capital

contribution in our investee company in China, namely ABL Wuhan, and concurrently, the third-party shareholders increased their registered

capital contribution accordingly.

Following this change, the third-party shareholders own 80% of equity interest and we own 20% of equity

interest in ABL Wuhan.

Consequently, ABL Wuhan ceased to be the Company’s subsidiary after August 4, 2023.

Therefore, we had cash outflow of $48,893 upon deconsolidation of a subsidiary and payment for registered capital of $29,906 during the

three months ended September 30, 2023.

Therefore, we had cash

outflow of $48,893 upon deconsolidation of a subsidiary and payment for registered capital of $29,906 during the six months ended

December 31, 2023.

Financing Activities

Net cash provided by financing

activities was $4,044,402 and $66,760 in the three months ended September 30, 2024 and 2023, respectively.

The increase in net cash provided

by financing activities was mainly due to the net proceeds of approximately $5,351,281 from the offering, partly offset by repayment of

$879,574 to shareholders, loans repayment of $265,456 and advancement to related party of $126,227 during the three months ended September

The net cash provided by financing activities for the three months ended September 30, 2023, was primarily attributable proceeds

from net proceed of loans of $102,863.

Net cash provided by financing activities was $4,295,361 for the six months

ended December 31, 2024, compared to net cash used in financing activities of $15,538 for same period in prior year, respectively.

The increase in net cash provided by financing activities was mainly due to the net proceeds of $5,351,281 from the offering and proceeds

from loan borrowing of $195,000 and a loan from a third party of $276,365, partly offset by repayment of $805,345 to shareholders and

loans repayment of $339,914 during the six months ended December 31, 2024.

The net cash provided by financing activities for

the six months ended December 31, 2023, mainly due to the proceeds from loans of $225,000 that we borrowed, and net proceeds

from shareholders by $158,455, partially offset by repayment of loans, vehicle loans and equipment loans of $245,564, and the payment

for deferred offering cost of 140,000.

Capital Expenditures

2 unchanged sentences

improvement and vehicles.

Our capital expenditures amounted to $38,279 and $nil in the three months ended September 30, 2024

and 2023, respectively.

Our capital expenditures amounted to $256,314 and $nil in the six months ended December 31, 2024 and

2023, respectively.

We expect that our capital

1 unchanged sentence

We intend to fund our future capital expenditures

with our existing cash balance, proceeds of loans, working capitals loans from stockholders and the proceeds from our IPO which was closed

in July 2024.

with our existing cash balance, proceeds of loans, working capitals loans from stockholders.

Commitments and Contractual Obligations

As of September 30, 2024, the Company’s contractual

obligations consist of the following:

As of December 31, 2024, the Company’s

contractual obligations consist of the following:

Contractual Obligations

1 unchanged sentence

Finance lease obligations

Construction-in-progress project

Vehicle loans

2 unchanged sentences

There were no off-balance

sheet arrangements as of and for the three months ended September 30, 2024 and 2023, that have, or that in the opinion of management are

likely to have, a current or future material effect on our financial condition or results of operations.

sheet arrangements as of and for the six months ended December 31, 2024 and 2023, that have, or that in the opinion of management

are likely to have, a current or future material effect on our financial condition or results of operations.

Critical Accounting Policies and Estimates

28 unchanged sentences

services rendered to customers.

While our significant accounting

policies are more fully described in Note 2 — Summary of Significant Accounting Policies to our consolidated financial

statements, we believe that there were no critical accounting policies that affect the preparation of financial statements.

While our significant

accounting policies are more fully described in Note 2 — Summary of Significant Accounting Policies to our consolidated

financial statements, we believe that there were no critical accounting policies that affect the preparation of financial statements.

Recent Accounting Pronouncements

38 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis